Bridging finance can be utilised as a short term financial solution when buying and selling properties. Also known as bridging loans, these loans help to support buyers with the moving process by assisting in the purchase a new property while awaiting the sale of existing properties. Bridging loans can also be used in other circumstances.
A bridging loan essentially offers a way of 'bridging’ the gap between a payment going out and and money coming in. They offer people a short-term funding option to assist them in completing a property purchase that may otherwise not be possible. This could be due to a break in the property sale chain, or due to high market demand with properties selling quickly. Typically these loans can be arranged quickly, offering a viable solution for raising funds quickly.
There are many reasons why a bridging loan may be used. If buyers need to purchase their new property before the sale of their existing property has gone through, this finance can be used the bridge the gap.
For landlords and property developers, these loans can help when purchasing a commercial or residential property at auction. There is a short space of time in which the developer will need to pay for the property in full and the loan allows them to complete the purchase whilst the mortgage is being organised.
Bridging loans can even be used in circumstances where a property is classed as ‘unmortgageable’ and this finance is used to make them habitable, and worthy of a mortgage. Other circumstances in which bridging finance can be used include:
Finding a suitable bridging loan for your needs can be difficult as there are multiple bridging lenders out there. There are many options so it's always advisable to use an FCA-regulated broker to assist you in finding the most competitive deal.
Transparent Mortgage Services are experts in bridging loans. Our advisors will help find the best deal for your circumstances, or advise you on alternative finance sources that might represent a more affordable option.
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Your Adviser will complete your application, liaise with the lender and you, keep you informed until completion.
Yes and this is one of the main benefits offered by this type of finance. For instance, if our advisors found you a bridging loan product your application could be approved in less than a day. After approval, the allocated funds can be with you in less than two weeks.
Things to consider when using a bridging loan are the interest rates. These are charged monthly but there is sometimes the option of paying it in a single sum at the end of the loan. You are also offered the option of securing the loan against multiple properties to help acquire adequate financing, and unlike mortgages the loan is not income based.
Timescales for these loans can be over the period of a year, or under, and there are some longer terms available.
Transparent Mortgage Services are independent brokers based in the heart of East Sussex. We work with clients across Seaford and the surrounding Sussex area. For advice on bridging finance or any mortgage or financial products please get in touch with our friendly advisors.
